Deck 8: Utility and Demand

Question 1

Mark's marginal utility from reading books is the ________ when he reads ________.

A) change in his total utility; one additional book
B) total utility he gets; one more book
C) change in his total utility; more books
D) consumer surplus he gets; books

Answer 1

change in his total utility; one additional book

Question 2

Suppose Jill's consumption bundle is made up of 2 goods, apples and bottles of juice. If the price of an apple increases, then Jill's budget line would

A) not change.
B) shift towards the origin on the apples axis only.
C) shift towards the origin on both the apples and bottles of juice axes.
D) shift away from the origin on the bottles of juice axis only.

Answer 2

shift towards the origin on the apples axis only.

Question 3

Utility is best defined as

A) the amount one is willing to pay for a good.
B) the price of a good.
C) the satisfaction from consuming a good.
D) the practical usefulness of a good.

Answer 3

the satisfaction from consuming a good.

Question 4

Marginal utility is the

A) usefulness of a product.
B) utility that a person receives from the consumption of goods and services.
C) change in utility that results from a one-unit change in the quantity of a good consumed.
D) change in utility that results from a one-unit change in the price of a good consumed.

Question 5

Total utility describes

A) the benefit gained from all consumption.
B) an increase in consumption multiplied by the gain in utility.
C) total consumption multiplied by marginal utility.
D) total consumption divided by marginal utility.

Question 6

________ is the additional satisfaction a person receives from consuming an extra unit of a good.

A) Total utility
B) Marginal utility
C) Diminishing marginal utility
D) Preferences

Question 7

Tom's consumption possibilities is defined by

A) his income and the prices of the goods that he consumes.
B) his preferences for consumption of the goods that he consumes.
C) the prices of the goods that he consumes only.
D) his income only.

Question 8

Marginal utility is the

A) total satisfaction that a person gets from the consumption of all of the units of a good consumed.
B) change in satisfaction that results from a one-unit increase in the quantity of a good consumed.
C) maximum price that a consumer is willing to pay for an additional unit of a good.
D) additional cost to a consumer when an additional unit of a good is consumed.

Question 9

As an individual's consumption of a good increases,

A) his or her total utility increases.
B) his or her marginal utility increases.
C) the price of the good increases.
D) All of the above answers are correct.

Question 10

The marginal utility from the consumption of a good is equal to the

A) total utility divided by the quantity consumed.
B) total utility divided by the price.
C) change in total utility divided by the change in the quantity consumed.
D) change in total utility divided by the change in price.

Question 11

The measure of the benefit you get from consuming the next cup of coffee is your

A) marginal utility of coffee.
B) total utility from coffee.
C) total utility per dollar spent on coffee.
D) total utility from coffee when you are at your consumer equilibrium.

Question 12

Which of the following statements is true?

A) As more of a good is consumed, its total utility increases, unless the good is subject to diminishing marginal utility.
B) As more of a good is consumed, its total utility increases, even if the good is subject to diminishing marginal utility.
C) No two people have identical utility functions, just as no two people have identical fingerprints.
D) Both A and C above.

Question 13

The total benefit that a person receives from the consumption of goods and services is called

A) total utility.
B) marginal utility.
C) marginal cost.
D) opportunity cost.

Question 14

A measure of all the satisfaction you receive from all the coffee that you consume is your

A) marginal utility of coffee.
B) marginal utility per dollar spent on coffee.
C) total utility from coffee.
D) marginal utility per dollar spent on coffee when you are in your consumer equilibrium.

Question 15

Liz's marginal utility for two different goods is determined by

A) her average utility for the two goods.
B) how much benefit she gets from another unit of each of those goods.
C) summing her total utility from consumption of each good and then dividing by two.
D) All of the above answers are correct.

Question 16

Marginal utility measures the

A) total utility from consumption.
B) additional utility from an additional unit of consumption.
C) average utility from an additional unit of consumption.
D) additional cost of an additional unit of consumption.

Question 17

A person's consumption possibilities is defined by the budget line because

A) it marks the boundary between what is affordable and unaffordable.
B) it represents the individual's preference for different combinations of goods.
C) it marks the boundary between what can be produced and what is unattainable given the current state of technology and resources.
D) all consumers must consume on their budget line.

Question 18

Which of the following is NOT an assumption of marginal utility theory?

A) A consumer derives utility from the goods consumed.
B) Each additional unit of consumption yields additional utility.
C) Consumers maximize their total utility.
D) As more of a good is consumed, the decrease in the marginal utility from the good means that the total utility from the good decreases also.

Question 19

As Sean's consumption of rice goes up, his

A) average utility from consuming rice increases.
B) total utility from consuming rice increases.
C) marginal utility from consuming rice increases.
D) elasticity of utility from consuming rice increases.

Question 20

The total utility from three skirts is

A) three times the marginal utility of the third skirt.
B) three times the price of a skirt.
C) three skirts divided by total income.
D) the sum of the marginal utility of the first skirt plus the marginal utility of the second skirt plus the marginal utility of the third skirt.

Question 21

The fact that the fourth plate from the "All You Can Eat Country Buffet" generated more satisfaction than the fifth plate is an example of

A) increasing marginal utility.
B) diminishing marginal utility.
C) diminishing total utility.
D) the "paradox of value."

Question 22

-The above table gives the total utility that Homer obtains from consuming various quantities of chocolate chip cookies. The marginal utility from the third pound of cookies is

A) 3.
B) 4.
C) 9.
D) 12.

Question 23

"I really enjoy watching movies. The first one is best. After that I still enjoy movies but the last one is not as much fun to watch as the one before it." This statement reflects the

A) principle of diminishing total utility.
B) principle of diminishing marginal utility.
C) principle of increasing marginal utility.
D) law of supply.

Question 24

Your marginal utility from a hamburger

A) is always greater than your total utility from hamburgers.
B) is always greater than your average utility from a hamburger.
C) is always greater than the price of a hamburger.
D) depends on how many hamburgers you've already eaten.

Question 25

-In the table above, which of the following is true?

A) Jim and Sally have increasing marginal utility.
B) Jim has increasing marginal utility and Sally has diminishing marginal utility.
C) Jim has diminishing marginal utility and Sally has increasing marginal utility.
D) Jim and Sally have diminishing marginal utility.

Question 26

The principle of diminishing marginal utility means that as you eat fewer slices of pizza, your total utility from pizza will ________ and your marginal utility from each additional slice of pizza will ________.

A) increase; decrease
B) decrease; increase
C) increase; increase
D) decrease; decrease

Question 27

-In the figure above, diminishing marginal utility is shown by

A) total utility curve A.
B) total utility curve B.
C) total utility curve C.
D) all three curves.

Question 28

Which of the following is consistent with the assumptions of marginal utility theory?

A) As Jose consumes more of one good, his marginal utility from consuming more of that good decreases.
B) As Jose consumes more of one good, his marginal utility from consuming more of that good increases.
C) As Jose consumes more of one good, his marginal utility from consuming more of all goods decreases.
D) As Jose consumes more of one good, his marginal utility from consuming more of all good increases.

Question 29

The principle of diminishing marginal utility says that

A) marginal utility is negative as the quantity of the good consumed increases.
B) total utility decreases as the quantity of the good consumed increases.
C) total utility increases by smaller and smaller amounts as the quantity of the good consumed increases.
D) total utility increases by larger and larger amounts as the quantity of the good consumed increases.

Question 30

As you consume more and more of any good, you experience ________ utility.

A) diminishing marginal
B) diminishing total
C) negative marginal
D) increasing marginal

Question 31

Liz loves to eat popcorn. Still, the more she eats, the less she wants each additional bite. Her marginal utility from popcorn is

A) diminishing.
B) negative.
C) increasing.
D) zero.

Question 32

Diminishing marginal utility means that

A) Ralph will enjoy his second hamburger less than the first.
B) the total utility from one hamburger exceeds the total utility from two hamburgers.
C) the price of two hamburgers is twice the price of one.
D) beyond a certain point, total utility decreases as income rises.

Question 33

If Pete enjoys his first pancake of the morning much more than his fifth pancake of the morning, he is exhibiting

A) utility maximizing behavior.
B) diminishing marginal utility.
C) irrational behavior.
D) diminishing total utility.

Question 34

According to the principle of diminishing marginal utility, as the quantity of a good or service consumed increases, total utility

A) increases.
B) decreases.
C) is unchanging.
D) is zero.

Question 35

The total utility you get from eating slices of pizza on a given night is the

A) marginal utility of the last slice times the total number of slices eaten.
B) sum of the differences in marginal utility as you increase the number of slices eaten.
C) sum of the marginal utilities of all slices eaten.
D) sum of the marginal utilities per dollar spent on all slices eaten.

Question 36

The principle of diminishing marginal utility can be used to explain why

A) Bob's second soda is less enjoyable than his first soda.
B) Bob's first soda is less enjoyable than his second soda.
C) Charlie enjoys his fourth soda less than Bob enjoys his first.
D) Bob enjoys his first soda more than Charlie enjoys his fourth.

Question 37

Marginal utility

A) characterizes things of little use.
B) is the additional utility derived from the last unit of a good consumed.
C) is an implication of the law of demand.
D) is always negative when total utility is positive and positive when total utility is negative.

Question 38

Marginal utility theory assumes that when Sally consume less of a good that she was previously consuming more than one unit of, her ________.

A) total utility increases
B) marginal utility increases
C) income increases
D) total utility is maximized

Question 39

-The above table gives the total utility that Homer obtains from consuming various quantities of chocolate chip cookies. The marginal utility from the fifth pound of cookies is

A) 1.
B) 2.
C) 3.
D) 15.

Question 40

The marginal utility of a third skirt is

A) three times the average utility of the three skirts.
B) three skirts times the price of a skirt.
C) the total utility of three skirts divided by three.
D) the change in total utility from the third skirt.

Question 41

The principle of diminishing marginal utility implies that the

A) marginal utility of a product is negative.
B) total utility from a product is also diminishing as more units are consumed.
C) rate of change of total utility is diminishing as more units are consumed.
D) rate of change of marginal utility is very low as more units are consumed.

Question 42

As the quantity of a good consumed increases, its marginal utility ________ and its total utility ________.

A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases

Question 43

-Julie's total utility from cheeseburgers is given in the table above. What is the marginal utility of the third cheeseburger?

A) 86
B) 28.7
C) 20
D) 14

Question 44

-The above table shows Homer's total utility from boxes of doughnuts. As Homer's consumption of doughnuts increases,

A) both his total utility and his marginal utility increase.
B) his total utility increases, but his marginal utility decreases.
C) his total utility decreases, but his marginal utility increases.
D) both his total utility and his marginal utility decrease.

Question 45

-The above table shows Homer's utility from boxes of doughnuts. As Homer's consumption of doughnuts increases, his

A) marginal utility is positive and increasing.
B) marginal utility is positive but decreasing.
C) marginal utility is negative but increasing.
D) marginal utility is negative and decreasing.

Question 46

-In the figure above, the marginal utility of the third crate of tomatoes for the person with total utility curve C is

A) 13 units of utility.
B) 16 units of utility.
C) 32 units of utility.
D) 45 units of utility.

Question 47

If marginal utility is positive but diminishing, as more units of a good are consumed, then the total utility from the good must be

A) falling.
B) positive and rising at an increasing rate.
C) positive and rising at a decreasing rate.
D) positive and rising at any rate.

Question 48

-The above table gives some of Tammy's total and marginal utilities from comedy videos. Which of the following statements is true?

A) Tammy's marginal utility from the third comedy video is equal to 580/3.
B) Tammy's total utility from five comedy videos is 800.
C) Tammy's marginal utility from the first comedy video is less than her marginal utility from the third comedy video.
D) None of the above answers are correct.

Question 49

If marginal utility is positive but diminishing, then total utility must be ________ as consumption of the good increases.

A) decreasing
B) positive and rising at an increasing rate
C) positive and rising at a decreasing rate
D) positive and rising at any rate

Question 50

-In the figure above, the curve that shows the diminishing marginal utility is

A) total utility curve A because it gets steeper as consumption of tomatoes increases.
B) total utility curve A because it is higher than total utility curves B or C.
C) total utility curve C because it gets flatter as consumption of tomatoes increases.
D) total utility curve C because it is lower than total utility curves B and C.

Question 51

As Goldilocks consumes more gummy bears, her total utility ________ and her marginal utility from gummy bears ________.

A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases

Question 52

As Sally increases her consumption of a good, she experiences diminishing marginal utility if her total utility

A) increases at a constant rate.
B) increases at a decreasing rate.
C) increases at an increasing rate.
D) decreases.

Question 53

-From the information in the above table, what is the marginal utility of the third quart of ice cream?

A) 80
B) 70
C) 60
D) 230

Question 54

As consumption increases, total utility increases

A) at an increasing rate.
B) at a decreasing rate.
C) at a constant rate.
D) and marginal utility increases.

Question 55

As Shana's consumption of tacos decreases, her

A) marginal utility from tacos increases.
B) marginal utility from tacos decreases.
C) total utility from tacos increases.
D) both total and marginal utility from tacos decrease.

Question 56

-The above table shows Homer's utility from boxes of doughnuts. The marginal utility that Homer receives from the third box of doughnuts is equal to

A) 75.
B) 25.
C) 20.
D) 3.

Question 57

Pizza Pepsi

-The table shows Elaine's utility from pizza and Pepsi. If Elaine consumes 2 slices of pizza and 3 Pepsis, her marginal utility from the fourth Pepsi is ________ units.

A) 60
B) 54
C) 40
D) 220

Question 58

As you consume additional hamburgers, the relationship between total and marginal utility is that

A) both total and marginal utility increase continuously.
B) both total and marginal utility decrease continuously.
C) total utility increases, but marginal utility decreases.
D) total utility decreases, but marginal utility increases.

Question 59

-The above table shows Homer's utility from boxes of doughnuts. If Homer decreases his consumption of doughnuts from 4 boxes to 3 boxes, his

A) total utility and marginal utility will both decrease.
B) total utility will decrease, but his marginal utility will increase.
C) total utility will increase, but his marginal utility will decrease.
D) total utility and marginal utility will both increase.

Question 60

A decrease in consumption will result in

A) both total utility and marginal utility decreasing.
B) total utility increasing, but marginal utility decreasing.
C) total utility decreasing, but marginal utility increasing.
D) both total utility and marginal utility increasing.

Question 61

Fritos Fruit drinks

-The table above shows the total utility from the two goods Freddy likes to consume. Suppose that Freddy has already eaten 5 bags of Fritos. If he consumes one more bag, his marginal utility will

A) equal 40.
B) equal 35.
C) equal 15.
D) depend on the price of the extra bag.

Question 62

-The table above gives Jane's total utility from magazines and CDs. What is the marginal utility of the sixth CD?

A) 150 units
B) 100 units
C) 50 units
D) 5 units

Question 63

-Kelly's marginal utilities for magazines and packages of gummy bears are listed in the table above. For Kelly, what is the total utility received from consuming 5 magazines?

A) 5
B) 20
C) 25
D) 255

Question 64

-Kelly's marginal utilities for magazines and packages of gummy bears are listed in the table above. What is the extra utility received by Kelly when she decides to consume 3 packages of gummy bears instead of 2 packages?

A) 20
B) 160
C) 180
D) 540

Question 65

-Jeannie's marginal utility from her 4th book in a month is 50. Her marginal utility from her 5th book

A) is greater than 50.
B) equals 50.
C) is less than 50.
D) might be more than, less than, or equal to 50 but more information is needed.

Question 66

-When Alex eats 1 slice of pizza, his total utility is 80; when Alex eats 2 slices of pizza, his total utility is 120. Alex's marginal utility from the second pizza is

A) 200.
B) 80.
C) 60.
D) 40.

Question 67

-The table above gives Jane's total utility from magazines and CDs. What is the marginal utility of Jane's sixth magazine?

A) 80 units
B) 60 units
C) 36 units
D) 15 units

Question 68

-When Ramona is in consumer equilibrium,

A) her total utilities of all goods are equal.
B) she is maximizing her utility, given her income and the prices of goods and services.
C) her total utility per dollar spent is equal for all goods.
D) any change in prices would make her worse off.

Question 69

-When a consumer spends all of his or her income and consumes a bundle of goods such that the marginal utility per dollar from all goods is equal, then the

A) consumer's total utility is maximized.
B) consumer is in his or her consumption equilibrium.
C) marginal utilities for each good are maximized.
D) Both answers A and B are correct.

Question 70

-Which of the following occur when a person maximizes utility? I. The marginal utility of each good bought is equal.
II) The highest level of utility is attained.
III) All of a person's budget is spent.

A) I and II
B) I and III
C) II and III
D) I, II and III

Question 71

-If the price of a good increases, all else the same, then the consumer's total utility will

A) increase.
B) decrease.
C) remain the same as consumption shifts to cheaper goods.
D) decrease if there are no substitutes for the good and remain the same if there are substitutes for the good.

Question 72

-The table above gives Andy's utility from popcorn. Andy's total utility from four boxes of popcorn is

A) 66.
B) 70.
C) 78.
D) 82.

Question 73

-The table above gives Jane's total utility from magazines and CDs. The price of a magazine is $4 and the price of a CD is $10. Which of the following correctly illustrates the principle of diminishing marginal utility? The fact that

A) the sixth magazine has less marginal utility than the sixth CD.
B) Jane's marginal utility per dollar from the second magazine is the same as her marginal utility per dollar from the third CD.
C) the marginal utility per dollar from the sixth magazine is less than the total utility from six magazines.
D) the marginal utility of the third CD is less than the marginal utility of second CD.

Question 74

-Ricky is in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal utility per dollar spent is ________ for ________ goods.

A) as small as possible; all
B) equal; all
C) equal; normal
D) maximized; all

Question 75

Fritos Fruit drinks

-The table above shows the total utility from the two goods Freddy likes to consume. If Freddy has consumed 4 fruit drinks and then decides to drink another,

A) his total utility will increase.
B) the marginal utility from the 5th drink equals 30.
C) the marginal utility from the 5th drinks equals 50.
D) Both answers A and B are correct.

Question 76

-With a given income and prices of goods, Marcus will be in a consumer equilibrium if ________.

A) his marginal utility from all goods is the same
B) he purchases the same amounts of all goods
C) he maximizes his total utility
D) his marginal utility from all goods is at its maximum

Question 77

-As more of a good is consumed, its marginal utility ________ and its total utility ________.

A) rises; rises
B) rises; falls
C) falls; rises
D) falls; falls

Question 78

Fritos Fruit drinks

-The table above shows the total utility from the two goods Freddy likes to consume. The marginal utility Freddy receives from consuming an extra bag of Fritos

A) depends on the quantity of fruit drinks consumed.
B) decreases as he consumes more bags of Fritos.
C) decreases as he consumes more fruit drinks.
D) equals 75 when he consumes 2 bags of Fritos.

Question 79

-Which of the following is NOT an assumption of marginal utility theory?

A) People derive utility from their consumption.
B) More consumption yields more total utility.
C) Marginal utility diminishes with more consumption.
D) Utility can be measured and the units of utility are precisely defined.

Question 80

-Economists using marginal utility theory assume that consumers' objectives are to

A) maximize their total utility.
B) maximize their marginal utility.
C) maximize their income.
D) none of the above